Key In GOP Health Care Overhaul: Massive Changes To Medicaid

Denver Health Medical Center's primary care clinic is located in a low-income neighborhood in southwest Denver. The recent expansion of Medicaid, which serves low-income Americans as well as the elderly and people with disabilities, would be rolled back under the new Republican health care plan.

David Zalubowski
/ AP

Originally published on March 14, 2017 2:21 pm

The debate over how many people would lose health insurance under the Republican health care overhaul and its impact on the budget deficit obscures one of the major and most far-reaching effects of the proposal: sweeping changes to Medicaid.

As a candidate, President Trump had promised "no cuts" to Medicaid. The Republicans' American Health Care Act, which Trump supports, would end an expansion of the coverage and restructure funding for it. The bill is the first part of a plan to repeal and replace the Affordable Care Act enacted under President Obama.

Everything from maternity coverage to pediatric care to care for people with disabilities and senior nursing home care is covered. According to the Kaiser Family Foundation, nearly half of all births are paid for through the program, and the vast majority of nursing home stays. Almost two-thirds of all spending is for the elderly and people with disabilities, the foundation finds. The federal and state cost of Medicaid was a total $532 billion in fiscal year 2015.

Under the Affordable Care Act, 31 states and the District of Columbia chose to accept expanded coverage, which allowed people earning up to 138 percent of the poverty level to enroll in the program. Some 11 million people did. Under the GOP replacement, that expansion would be phased out, although those now in the program would not lose their coverage.

But the changes are more widespread than that. Currently, Medicaid payments to states are based on a matching formula, with the federal government paying states a share of their costs. The GOP proposes capping payments to states, with different amounts going to different categories of recipients — children, the elderly and people with disabilities.

The Congressional Budget Office, in its analysis of the GOP program, said those changes would reduce federal spending on Medicaid by $880 billion over the next 10 years, a 17.6 percent cut. And it says the changes would mean Medicaid beneficiaries would be reduced by some 14 million people — about half of the additional uninsured under the GOP bill — by 2026.

House Speaker Paul Ryan says the changes "modernize Medicaid."

But advocates for the program call it something else. After the CBO released its analysis Monday, House Democratic leader Nancy Pelosi called on Republicans to pull their bill from consideration, saying it's "the only decent thing to do."